Listed infrastructure bounces back

The listed infrastructure sector has rebounded from the lows it experienced in 2008 with the result that ratings house Standard & Poor’s (S&P) has delivered its coveted four star rating to four funds, two of which were placed “on hold” last year.

The four funds to gain the top rating were the RARE Infrastructure Value fund, the RARE Series Value fun, the Vanguard Global Infrastructure Fund and the Vanguard Global Infrastructure Hedge fund. Both of the RARE funds had been placed “on hold” during the previous ratings period.

Commenting on the sector, S&P said listed infrastructure funds had achieved strong absolute returns over the past year, helped by a return to fundamentals following a period of difficult market conditions.

It said all the global hedged funds returned more than 10 per cent for the year to June as pure play infrastructure assets rebounded strongly off lows in 2008.

Commenting on the sector, S&P fund services analyst, Simone Arblaster said the company had rated the majority of the funds in the peer group as three stars mostly due to the limited track records of some of the products.

However she said that from discussions with managers and S&P’s review of the infrastructure sector, it believed the long-term outlook continued to be positive.

“Due to a combination of under-spending by Governments in the sector and a deficiency in Government budgets, there is growing need for private sector funding in infrastructure,” Arblaster said.